The CTO Revelation

Today’s CTOs are charged with transforming technology into a strategic asset and articulating a focused vision for its role—whether through enabling platforms, propelling innovation, or defining responsible and sustainable design patterns and architectural principles. They are well positioned to steer initiatives in a world where the technology function is core to every interaction and every business process.

The role of CTOs has evolved to encompass some of the organization’s most far-reaching capabilities—running the gamut from defining a tech strategy to implementing it responsibly. The strategic nature of their job has placed them in a position of heightened interaction with senior leadership, with 55% of those surveyed noting their primary C-suite engagement is with the CEO and an equal percentage engaging with the Chief Operating Officer (COO).

With an increased level of input, tech leaders must refine their communication skills. Ericsson’s Vice President and Head of Global Competence Center, Lotta Karlsson-Boman, notes, “Many started on a very technical level and then moved into higher management positions. It has been easy to hide behind deep technical discussions. You now need to have totally different discussions with the business. And you need to have the confidence to question the business.”

The breadth of responsibilities also requires a balancing act. On the one hand, CTOs must understand how technology contributes to—and can remediate—operational challenges, while on the other hand, they need to see how technology innovation can seed new opportunities.

Our analysis indicates that organizations reporting higher technology maturity, technology effectiveness, and technology ROI achieved better business performance. In particular, we discovered financial gains accelerated during the pandemic—organizations with higher technology measures built a substantial advantage over their peers.

“Innovation is a competitive battleground,” says NatWest’s Kevin Hanley. “We need to drive the culture inside the organization, shine the light on technology direction and big broad trends, and think about what it all means to the business.”

But how can organizations pick up the pace of innovation? One answer lies in the scientific community’s response when faced with the urgency of the COVID-19 crisis. Technologies such as AI and hybrid cloud empowered scientists to speed up the scientific method and remove long-standing bottlenecks. With the pandemic as a proving ground, employing modern technologies forms the basis for a new era of accelerated discovery. This approach can extend advances beyond the realm of science, leading not only to new business opportunities but entirely new asset classes, services, and markets. The difference: those willing to adopt the rigor of the scientific method of discovery and experimentation to make evidence-based business decisions.

Developments in the materials science field demonstrate the potential of scaling the scientific method to accelerate discovery. Deep search, AI- and quantum-enriched simulation, generative models, and cloud-based, AI-driven laboratory environments are delivering faster innovation in a domain known for intensive, highly complex workloads. Hybrid cloud has provided a bridge across a mix of data and compute resources—facilitating the integration of additional technologies, such as quantum computing and intelligent simulation—that enable scientific discovery at speed and scale.

Ecosystems and partnerships are essential to unlocking the potential of a Virtual Enterprise. To create value propositions that transcend traditional boundaries, organizations require sophisticated and robust data sharing practices; policies that support changing compliance requirements; intelligent workflows that extend beyond functional siloes; a common approach to cybersecurity threats; and open innovation procedures that facilitate cross-functional collaboration. These responsibilities are calls-to-action for technology leaders.

CTOs have front-row seats to digital transformation and can play an instrumental role in enabling extended workflows based on emerging “threads of value.” Prominent among their responsibilities, CTOs are tasked with translating the promise of modern technologies to the C-suite and, increasingly, to the Board. Additionally, CTOs are finding new opportunities in strategic partnerships. By sharing insights, services, and customers across the ecosystem, partnerships can unlock entirely new business models.

In reflecting on the goals of partnerships, CTOs in this study stated that sharing data insights effectively was the top objective. Among the other highly cited purposes: enhancing transparency and visibility, improving trust, and advancing collaboration.

These CTOs represent about 40% of our global survey sample and are distinguished by the outward-focused nature of this directive. When it comes to identifying and building strategy, this group is encouraged to identify and incorporate insights and inspiration from outside the organization. In addition, these CTOs most commonly describe themselves as organizational and ecosystem integrators.

However, Technology Stewards are not lone wolves or disconnected from their organizations. In fact, they report a high rate of collaboration within the technology function. While looking outward, they also prioritize applying any new insights internally. This group reports the highest technology effectiveness as well. While the technology maturity of these CTOs’ organizations is only middle-of-the-road, their progress is fueled by new perspectives.

This group of CTOs represents just over a quarter of our survey respondents. They might well be described as “CIOs in disguise” as they seem to straddle both CTO and CIO responsibilities. However, their role is focused more on driving business revenue, suggesting the utility-focused nature of this group’s mandate.

Perhaps unsurprisingly, this group reports the lowest technology effectiveness among the 3 cohorts. But these Hybrid Heroes deliver dramatically when it comes to collaboration and tech maturity. With a broader mandate covering more areas of ownership and partnership opportunities, these CTOs report high collaboration and the highest tech maturity.